Tax Responsibilities during Pending Divorce

 Posted on November 04,2015 in Divorce Finances

When your divorce is pending, it is easy to feel overwhelmed. Day-to-day concerns, like balancing your checkbook and remembering to take your car for its scheduled maintenance, can fall to the wayside as you focus on working out the details of your divorce settlement. One of the things you can easily lose track of is paying your taxes. In addition to being busy with your divorce, you might also feel confused about how to file them this year. Discuss your tax responsibilities with your divorce attorney. It is important that you know how you will handle your taxes ahead of time. Issues like your property division, child custody, and spousal maintenance can all have specific tax implications.

You Can Still File as a Married Couple

While your divorce is pending, you are still technically married. This means that you are still entitled to file your taxes jointly with your spouse. This comes with certain benefits for you, such as a large standard deduction.

Filing jointly requires you to work with your spouse amicably. This makes it immensely easier for you both. In some divorces, the judge rules that the couple must file their taxes jointly in order to preserve a larger portion of their marital estate to divide in the divorce.

How Can My Tax Responsibilities Be Affected by the Divorce?

When the court is dividing your property, it will consider the taxes attached to each piece of property. A piece of taxable property's tax obligation is factored into its value. This is commonly done with houses and small businesses. Factoring the tax obligations of these kinds of property is done to make the division of the property among the spouses more equitable, rather than saddling one partner with the bulk of the tax responsibilities.

New expenses, such as spousal maintenance, also have tax implications to be considered. Any income received through spousal maintenance is taxable, meaning that the recipient must pay taxes on it. Likewise, the paying spouse can deduct these from his or her tax return.

If one parent is named the child's custodial parent, he or she can claim the dependent exemption on his or her taxes. In addition to this, the custodial parent could be entitled to the Child Tax Credit and Child and Dependent Care Credit.

Kane County Divorce Attorneys

Taxes can be complicated. Your divorce can complicate them further. Make tax season as stress-free as possible this year by discussing your tax situation with a member of our team of experienced Kane County divorce attorneys at Goostree Law Group Contact us today to schedule your free legal consultation with us. We can answer all of your questions about the divorce process and your rights and responsibilities throughout it. Do not wait to give us a call and schedule your consultation – the key to successfully completing an efficient divorce is educating yourself about all its elements beforehand. We are here to educate you.

Sources:

http://www.ilga.gov/legislation/ilcs/ilcs4.asp?DocName=075000050HPt.+V&ActID=2086&ChapterID=59&SeqStart=6100000&SeqEnd=8400000

https://www.irs.gov/uac/Ten-Facts-about-the-Child-Tax-Credit